Rental Property Mortgages

Just like a primary residence, purchasing rental or investment properties will require you to apply for a loan and make a monthly mortgage payment. Unfortunately, interest rates for rental properties will be considerable higher than your primary mortgage because it is inherently a higher risk loan. The act of purchasing rental property, or “flipping” a house, has become popular during the recent recession because buyers can purchase possibly foreclosed homes for cheaper prices, rent them out, and then sell them for a large profit.

While you own a rental property, you may choose to refinance it in order to maximize your profits. In this case, most professionals advise you to go to the lender or bank that holds your loan and work with them personally. During this process, you may find it difficult to refinance. In that case, you need a mortgage modification lawyer to work with you.

Refinancing Your Rental Property

When refinancing a property, lenders will ask you whether it is your primary residence or not. Because rental property interest rates are higher than interest rates for mortgages for primary homes, many owners try to cheat the system by claiming a rental property as their place of residence. This would be considered fraud and could have serious repercussions. If you are considering refinancing your rental property, consider the following:

• Is your monthly mortgage payment larger than the amount you are earning in rent? If so, you aren’t making a profit.
• Estimate the amount of appreciation on the property over the years. This will give you a good idea on the profit you could potentially make in the future if you sell the property.

If you have any questions you should contact a mortgage modification lawyer today.

Contact Us

If you have any questions about refinancing a rental property, contact the Maryland mortgage modification lawyers of Chaifetz & Coyle, P.C., at 443-546-4608 and speak with a professional.